Category: Stock Market

The Transurban Group (ASX: TCL) share price is edging lower today. This comes amid the backdrop of the company’s release of its first-half results for FY22 last Thursday.

The toll road operator’s shares advanced 1.55% to $13.08 on the day of the announcement. However, since then its shares have fallen wayside with three consecutive days of losses, not including today.

At the time of writing, Transurban shares are swapping hands for $12.71, down 0.24%.

Below we look at the company’s latest financial performance and the details regarding the interim dividend for investors.

How did Transurban perform for H1 FY22?

In the half-year results for the 2022 financial year, Transurban reported challenging trading conditions caused by government-mandated restrictions related to COVID-19.

Proportional toll revenue fell 0.4% to $1.2 billion over the prior corresponding period. This was triggered by average daily traffic which decreased 4.8% generally across all regions.

In addition, proportional earnings before interest, taxes, depreciation and amortisation (EBITDA) slid 4.1% to $805 million.

Free cash also fell 1.6% to $459 million, as a result of a decrease in cash flows from owned assets, an increase in distributions and shareholders’ loan note payments, and unfavourable movements in working capital.

Nonetheless, the board declared an unfranked interim dividend of 15 cents per share to eligible shareholders.

Transurban noted that the distributions for the first half were covered by free cash with no capital releases conducted.

Payment details of the Transurban dividend

If you were hoping to get in on the action, unfortunately you are out of luck. The ex-dividend date by which you must have acquired Transurban shares was 30 December 2021.

Furthermore, the company paid the interim dividend to eligible shareholders yesterday.

There was also a distribution reinvestment plan (DRP), where investors receive additional shares in substitution for some or all cash distributions.

The last date for receipt of an election notice for participation in the DRP was 4 January 2022.

While no discount had been applied when determining the price of the stapled securities, just 2.3% of shareholders participated.

The post Just banked the Transurban (ASX:TCL) dividend? Here’s what you need to know appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The St Barbara Ltd (ASX: SBM) share price is in the red today on the back of the company’s half-year results.

At the time of writing, St Barbara shares are swapping hands at $1.39 apiece, a 3.33% fall, after the share price dropped as low as $1.34 earlier in the session. In comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.33%.

Let’s take a look at what the gold miner reported today.

St Barbara share price share price drops

Highlights of the company’s half-year (H1 FY22) results include:

• Statutory profit of $14 million, down 62% on the previous corresponding period (PCP) of H1 FY21
• Underlying profit of $15.1 million, down 63% on PCP
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $103 million, down 32% on PCP
• Gold production of 132,524 ounces
• All In Sustaining Cost (AISC) of $1,539 per ounce

What else happened in the half?

The company’s underlying profit dropped 63% from $39.9 million in the first half of FY21 to $15.1 million. This was due to a drop in contribution from the company’s Simberi and Atlantic operations. However, this was partly offset by a higher contribution from its Leonora operations.

Gold production fell 18% compared to the first half of 2021, while the AISC also fell 4%. Partially offsetting this decline in production was a boost in the realised gold price. This jumped by 13% to $2,417 per ounce.

The board has decided not to pay an interim dividend due to the operational issues at the Simberi mine in Papua New Guinea.

Gold production at Simberi is not achieving its target rates and there is still uncertainty as to when the mine will return to full workforce participation. This is due to high COVID-19 infection rates.

As the company reported on 18 February, there were 139 active cases among the mine’s 600 strong workforce.

Nonetheless, the company reported cash contributions from its operations of $41.583 million.

In December, St Barbara revealed plans to acquire Bardoc Gold Ltd (ASX: BDC) for $157 million. If approved, this will provide St Barbara with access to advanced Aphrodite and Zoroastrian underground deposits.

Management commentary

Speaking on the results, St Barbara CEO and managing director Craig Jetson said:

I’m pleased to present St Barbara’s strong results, which we’ve achieved in spite of several enduring headwinds, including those brought on by the COVID-19 pandemic.

We now have all three assets in operation, are well progressed in the scheme of arrangement with Bardoc Gold and are laser focused on delivering to our upcoming pre-feasibility and feasibility study milestones.

As we continue to execute the province plans put in place in late 2020 delivery of these plans underpins our new aspiration of annual gold production of 600 thousand ounces (koz) per annum with ten years of life – a real differentiator in the market.

What’s next for St Barbara?

As Jetson outlined, St Barbara has aspirations to produce 600 koz of gold annually from its mining operations.

This includes 270 koz at its St Leonora operations once its proposed 2.1 million tonnes per annum processing facility is installed and 180 koz from its Simberi operations once it has completed its sulphides project.

St Barbara also has a plan to produce 150 koz from its Atlantic operations once production comes online at Beaver Dam, Fifteen Mile Stream, and Cochrane Hill.

The company said it has business continuity plans in place to reduce COVID-19 disruptions at all of these operations.

St Barbara hopes to achieve shareholder approval of the Bardoc Gold acquisition before the end of the financial year. A meeting of Bardoc shareholders is planned for 30 March 2022.

According to the company’s report, the board will reassess whether it pays a final dividend at the end of FY22.

St Barbara share price summary

The St Barbara share price has dived 35% in the past 12 months while it is down around 5% year to date.

For perspective, the benchmark ASX index has returned around 5% over the past year.

St Barbara has a market capitalisation of about $989 million based on today’s share price.

The post Profits down: St Barbara (ASX:SBM) share price slides 5% on half-year results appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The WiseTech Global Ltd (ASX: WTC) share price is having a mildly positive day on Wednesday.

In afternoon trade, the logistics solutions technology company’s shares are up 1% to $43.28.

This modest gain by the WiseTech share price may be quite disappointing for shareholders given the company’s strong half year result and guidance upgrade.

What’s going on with the WiseTech share price?

It’s not often you get such a muted response to an earnings guidance upgrade, but that is what’s happening with the WiseTech share price today.

In case you missed it, this morning the company reported an 18% increase in revenue to $281 million and a 54% jump in EBITDA to $137.7 million. This strong result was driven by increased market penetration, customer usage, and adoption of its technology, as well a price change to CargoWise.

Recurring on-demand revenue grew 25.4% to $225 million and WiseTech’s CargoWise attrition rate was once again below 1%.

This ultimately led to management reaffirming its full year revenue growth guidance and upgrading its EBITDA guidance.

Based on market conditions not materially changing, WiseTech expects revenue growth of 18% to 25%. This will represent revenue of $600 million to $635 million.

As for its earnings, management has upgraded its EBITDA growth guidance to 33% to 43%, which represents EBITDA of $275 million to $295 million. This is up from its prior guidance of 26% to 38%, which implied EBITDA of $260 million to $285 million.

Why are its shares not rising more?

There are a couple of potential reasons for the subdued performance by the WiseTech share price.

One is the company’s track record of upgrading its guidance. Over the last few years, WiseTech has upgraded its guidance on a number of occasions. This may have led to the market already pricing in a guidance upgrade.

Another factor that could be weighing on the WiseTech share price is management’s outlook commentary. Although it is positive on the second half, its guidance came with a warning.

Management said: “Uncertainty around future economic and industrial production growth and/or global trade may lead to alternative outcomes. Prevailing uncertainties relating to sovereign and geopolitical risk may also reduce assumed growth rates.”

The post Great expectations: Why is the Wisetech (ASX:WTC) share price not gaining more today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended WiseTech Global. The Motley Fool Australia owns and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Integral Diagnostics Ltd (ASX: IDX) are in limbo today after the company released its interim report and financial results for the half-year ended 31 December 2021 and, concurrently, put its shares in a trading halt.

The halt is pending a market sensitive announcement in connection with an acquisition and capital raising to be made via an entitlement offer.

Before the halt was in place, the Integral Diagnostics share price closed the day at $3.91.

Integral Diagnostics share price halt amid earnings results

Key takeouts from the company’s earnings results today include:

• Operating EBITDA of $39.5 million (21.9% margin) on operating revenue of $180.5 million
• Operating diluted earnings per share (EPS) of 6.4 cents on operating net profit after tax (NPAT) of $13.0 million
• Statutory NPAT of $10.2 million after customer contract amortisation, transaction and other costs of $2.8 million
• Free cash flow of $24.8 million with net debt of $176.8 million
• Interim dividend (fully-franked) of 4.0 cents per share payable on 4 April 2022
• Announcement of acquisition of Peloton Radiology and an Entitlement Offer

What else happened this half for Integral Diagnostics?

The company recognised revenue growth of $7.4 million in Australia totalling around 5% and an 18% decrease of $3.9 million in New Zealand.

Integral was also busy building out its infrastructure and operating platforms during the half. It notes that $14.6 million was spent on capital expenditures (CapEx). Of that amount, $10.4 million was allocated to “growth initiatives including the development of three new sites”.

Aside from that, operating NPAT was strong at $13 million and this carried through to statutory NPAT of $10 million and free cash flow of approximately $25 million.

These results allowed Integral’s board to declare a fully-franked interim dividend of 4 cents a share, a small drop on last year. This equates to a 70% payout ratio that the company notes is in line with historical levels.

“The decrease in the interim dividend on the prior corresponding period reflects the impact of COVID-19 on the performance of the business during the 6 months to 31 December 2021”, the company said.

In addition to these results, Integral advised it has agreed to acquire Peloton Radiology.

“Peloton Radiology is a scale provider of diagnostic imaging services with a strategic presence from Brisbane to the Sunshine Coast in the high growth corridor of South East Queensland,” Integral said.

According to the announcement, Peleton has pro forma FY22 EBITDA of $8 million and was acquired on an implied acquisition multiple of 8.8x pro forma FY22 EBITDA.

The acquisition is expected to be completed in 2022 and will be financed via an entitlement offer that was announced to the ASX today.

Management commentary

Speaking on the results today, Managing Director and CEO of Integral Diagnostics Dr Ian Kadish said:

We are delighted to incorporate Peloton Radiology into Integral Diagnostics. The group’s radiologists and staff represent a strong strategic and cultural fit with IDX’s doctor led operating model. The Peloton Radiology group adds real value to IDX’s market leading model and it significantly extends our presence in the Queensland market. We extend a warm welcome to the Peloton Radiology doctors and staff and look forward to partnering with them to further grow our combined business.

What’s next for Integral Diagnostics?

Integral is bullish on the industry. It notes, “the underlying fundamentals of the radiology industry remain strong and the company is confident that patient volumes and historical growth patterns will over time return to pre-COVID-19 levels, and that continued investment in our workforce and infrastructure has positioned the Company well.”

However, it also acknowledges that, while 2H FY22 performance to date “continues to be impacted by COVID-19, there are some early signs that patient volumes are returning, especially in our Queensland operations, albeit the impact of COVID-19 on 2HFY22 results remains uncertain.”

Integral Diagnostics share price summary

In the last 12 months, the Integral Diagnostics share price has collapsed more than 20% and is down 21% this year to date.

During the past month of trading, the company’s shares have slipped 8%, leaving Integral’s performance trailing the broad indexes this year.

The post Integral Diagnostics (ASX:IDX) share price on ice after trio of big announcements appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Integral Diagnostics Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Propel Funeral Partners Ltd (ASX: PFP) share price is up 1.7% in early afternoon trading.

Propel Funeral shares closed yesterday’s trading for $4.53 and are currently at $4.61.

Below we take a look at the ASX funeral services company’s financial results for the half year ending 31 December (1H FY22).

Propel Funeral share price gains on revenue leap

• Revenue increased 15.2% year-on-year to $68 million
• Pro forma operating earnings before interest, taxes, depreciation and amortisation (EBITDA) of $18.4 million, an increase of 17.8% from the 1H FY21
• Pro forma1 operating net profit after tax (NPAT) lifted 30.4% to $7.8 million
• Interim dividend of 6 cents per share (cps) declared, fully franked, equal to the prior corresponding half year

What else happened during the half year?

Despite reporting that its operations were impacted by pandemic lock downs and funeral attendee limits in parts of Australia and New Zealand during the half year, Propel’s total funeral volumes increased 14.9% compared to 1H FY21. Comparable funeral volumes were up 7.8%.

Propel Funerals also improved its balance sheet with a $50.2 million share placement to new and existing institutional investors, atop raising $13.7 million from eligible shareholders via a share purchase plan.

As at 31 December 2021, Propel had $423.2 million of total assets, a gearing ratio of 13.3%, and $149.3 million of available funding capacity.

The interim dividend will be paid on 7 April with a record date of 7 March.

What did management say?

Authoring the report, Propel’s chairman, Brian Scullin and managing director Albin Kurti noted:

During 1H FY22, Propel reviewed a number of potential acquisition opportunities and committed $21.0 million on … six acquisitions announced in Australia and New Zealand…

Propel remains focused on its core strategy of acquiring assets and social infrastructure which operate in the death care industry in Australia and New Zealand. Since its IPO in November 2017, Propel has committed approximately $147.7 million on acquisitions and continues to explore other potential acquisitions, however, the timing associated with any future acquisitions is uncertain.

What’s next?

Looking ahead, the Propel Funeral share price could be getting an extra bit of lift from the company’s expectations that it will benefit from “favourable demographics” in Australia and New Zealand.

Propel also highlighted its strong funding position, and expects additional benefits from the acquisitions that have already been announced and completed along with potential new future acquisitions.

While noting that COVID-19’s ongoing impacts remain uncertain, Propel reported it has started 2H FY22 with positive trading momentum.

Propel Funeral share price snapshot

The Propel Funeral share price is up 55% over the past 12 months, well outpacing the 5% gains posted by the All Ordinaries Index (ASX: XAO).

So far in 2022, Propel Funeral shares are up 5%.

The post Propel Funeral (ASX:PFP) share price marching higher on revenue leap appeared first on The Motley Fool Australia.

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• Ups and downs: Why is the Cettire share price leaping 10% today?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Propel Funeral Partners Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price cracked a new 52-week low on Wednesday.

At the time of writing, shares in the pizza franchisor are down 16.22% to $83.93. However, Domino’s shares hit a new low of $83.25 earlier in trade today.

So, what has caused this significant degradation in investor sentiment towards the Domino’s share price?

High hopes meet headwinds

Investors are reacting negatively to the release of Domino’s half-year results for the six months ended 31 December 2021 today. Despite network sales increasing 11.1% to $2,048.4 million, the market appears to be focusing on the challenges for the company.

Due to a number of cost increases, Domino’s bottom line felt the pinch, leading to the company’s first decline in underlying earnings per share (EPS) in more than 11 years, as shown below.

While there was $2.9 million worth of one-off significant items for the company during the half, increases in operational costs also took a bite out of earnings. Perhaps shareholders are taking this as a sign that the Domino’s share price may not be insulated from inflation.

These cost increases included:

• ~$64 million increase in food, equipment, and packaging expenses
• ~$11 million increase in employee expenses
• ~$16 million increase in marketing expenses

Unfortunately, with the Domino’s Pizza share price trading on a 47 times price-to-earnings (P/E) ratio heading into these results, investors were likely hoping for an improvement in profits.

What else is hitting the Domino’s share price today?

The company also provided some more colour on what the near future is looking like. To shareholders’ disappointment, the short-term outlook holds challenges for the business.

Domino’s Pizza group CEO and managing director Don Meij said:

We are not immune to the challenges facing the global economy, but these are short-term challenges we will navigate through, with a continued focus on the long-term. Importantly, despite this short-term uncertainty, there is no question that our business is materially stronger than prior to COVID-19.

Finally, Domino’s admitted same-store sales growth for FY22 would fall below its target range.

The Domino’s Pizza share price is down 28.89% since the beginning of the year.

The post Slow down: Why the Domino’s (ASX:DMP) share price is sinking 16% appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Xero Limited (ASX: XRO) share price is essentially trading at a 52-week low. What could be next for the cloud accounting software business?

Xero has had a very tough start to the 2022 calendar year. Xero shares have fallen 32% in less than two months.

What’s going on with the Xero share price?

There is a lot of geopolitical uncertainty with what’s happening between Russia and Ukraine.

But the large majority of the decline of the Xero share price came as the market fretted about the high levels of inflation that the US is seeing which is expected to lead to higher interest rates to try to get things under control. Goldman Sachs thinks there could be seven interest rate hikes in the US in 2022.

Why do interest rates matter so much? Let Warren Buffett, one of the world’s greatest investors, explain:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature … its intrinsic valuation is 100% sensitive to interest rates.

That was from the 1994 annual general meeting (AGM) of Berkshire Hathaway.

What next for the Xero share price?

No-one knows for certain what’s going to happen next. Unless they have a working crystal ball.

But several brokers have price targets for the business. A price target is where the brokers think that the share price will be in 12 months from that date. However, some of these price targets came from last year, before the recent crash.

Price targets

Both Citi and Credit Suisse rate the Xero share price as a buy, with a price target of $160. That implies a 60% upside to today’s price.

However, UBS rates Xero as a sell with a price target of $88. That would be more of a decline if it happened.

The brokers at Macquarie have given a recent update to their thoughts on Xero. It upgraded the rating to ‘neutral’ with a price target of $100 (down from $130). Macquarie doesn’t think that Xero will fall much more and believes that it’s looking attractive for the long-term.

Recent result

Xero continues to grow quickly. FY22 half-year revenue rose 23% to $505.7 million, with subscriber numbers rising 23% to 3 million and the gross profit margin improving by 1.4 percentage points to 87.1%.

The ASX tech share continues to invest for growth for the long-term growth of the business and capture global market share. It recently made a bolt-on Canadian acquisition to accelerate growth in that market.

The post The Xero (ASX:XRO) share price is trading at 52-week lows. What’s next? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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After yesterday’s nasty fall, the ASX share market seem to be recovering so far this Wednesday. At the time of writing, the All Ordinaries Index (ASX: XAO) is up a decent 0.34%. But the Cettire Ltd (ASX: CTT) share price is once again doing something far more dramatic.

Yesterday, we looked at Cettire shares and the very depressing 14% drop they inflicted upon investors at one point. The company ended up finishing down around 9.5%, a big improvement on the worst of the company’s falls yesterday, but still a considerable drop nonetheless.

Well, unfortunately for anyone who capitulated and sold out of Cettire yesterday, the company has enjoyed a massive rebound today. The Cettire share price is currently up a very pleasing 9.05% at the time of writing at $2.29 a share. That’s after opening at $2.15 a share this morning.

Why is the Cettire share price rebounding 10% today?

Yesterday, we couldn’t identify any real reasons why the Cettire share price plunged by so much. We could only speculate that it may have been a consequence of this luxury fashion retailer’s stellar share price performance over 2021. Perhaps assisted by the company’s mixed-bag half-year earnings results that Cettire reported back on 3 February. After all, this is a company whose share price remains up close to 130% over the past 12 months, even after falling more than 50% since November.

Unfortunately, we are in the same position in explaining Cettire shares’ rise today. There has been no news or announcements out of the company to speak of. So perhaps investors have simply decided that yesterday’s steep sell off took things too far, and we have some bargain hunters flocking in today to pick up shares.

Whatever the reason, it’s certainly a happier day today for Cettire investors.

At the current Cettire share price, this company has a market capitalisation of $880 million.

The post Ups and downs: Why is the Cettire share price leaping 10% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Cettire Limited. The Motley Fool Australia has recommended Cettire Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The APA Group (ASX: APA) share price is sliding after the company released its earnings for the first half of financial year 2021.

At the time of writing, the APA Group share price is $9.92, 2.27% lower than its previous close.

APA Group share price falls despite new acquisition play

• Revenue of around $1.12 billion – a 4.3% increase on that of the first half of financial year 2021
• Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) of $859.8 million, up 4.5%
• After-tax profit of $155.6 million, compared to the prior comparable period’s $15.5 million loss
• Organic growth pipeline now exceeds $1.4 billion
• Rights to acquire Basslink
• 25 cent interim dividend – 4.2% higher than its previous interim dividend

Energy infrastructure company – best known for its gas transmissions lines – reported underlying EBITDA of $859.8 million, driven by revenue growth across all segments of its business.

Particularly strong growth was recorded from the Victorian Transmission System and Diamantina Power Station.

The company’s incomes were also boosted by tariff escalation.

Its surging post-tax profit was mostly due to a one-off non-cash impairment of $249.3 million recognised in the prior comparative period from the Orbost Gas Processing Plant.

Free cash flow for the half came to $515.1 million – an increase of 22.6%.

Additionally, APA Group reached a final investment decision on $150 million worth of growth projects in the half. The projects will support the expansion of its revenue expansion in future years.

The projects encompass gas pipelines and renewable energy generation.

The company’s results also included news of its plan to strategically invest in the senior secured debt of Basslink – a major energy link connecting Tasmania to the mainland, announced earlier this week.

Basslink was put into receivership in November 2021, little more than a month after APA Group confirmed it was in discussions to acquire the asset.

It will work alongside Hydro Tasmania, the State of Tasmania, the Australian Energy Regulator, and other stakeholders to convert Basslink into a regulated asset.

What else happened during the half?

During the first half of financial year 2021, the APA Group share price moved higher after it submitted a takeover offer for formerly-listed Ausnet Services.

The company’s bid was ultimately rejected in favour of an all-cash bid from Brookfield Asset Management Inc.

If that name sounds familiar, it’s because it recently offered to acquire AGL Energy Limited (ASX: AGL).

Additionally, during the half, APA Group put a plan to test if Victoria’s gas transmission system could be used to blend hydrogen to the Australian Energy Regulator.

What did management say?

APA Group CEO and managing director Rob Wheals commented on the company’s half year results, saying:

We are making good progress on our strategy and laying the foundation for future growth.

With coal generated electricity retiring over the coming decades, we remain highly confident in the critical role for gas as a source of timely, cost effective and secure energy. It is an essential companion for the ongoing growth in renewable energy. Gas is also the critical energy source in high heat and hard to abate sectors, supporting Australia’s industrial businesses.

At the same time, we have continued to invest in renewables, battery storage, microgrids, electricity transmission and the energy solutions of tomorrow.

What’s next?

The company has retained its financial year 2022 guidance of 53 cents per share of distributions. That’s a 3.9% increase on that of financial year 2021.

It also said it’s in a good position in the current environment, as almost all its contract revenues are linked to inflation.

Additionally, it will continue to invest in business development and systems and processes such as cloud or software-as-a-service technology solutions.

APA Group share price snapshot

Today’s fall included, the APA Group share price is 2.5% lower than it was at the start of 2021.

Though, it has gained 9% since this time last year.

The post APA (ASX:APA) share price falls despite laying ‘foundation for future growth’ appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Ah, inflation… It’s certainly been the talk of the ASX town over 2022 thus far. The current Russia-Ukraine crisis is dominating the minds of most ASX investors right now. But it’s inflation that’s likely to remain the dominant investing theme of the year. That’s why many ASX investors have been wondering how to make sure their ASX share portfolios are ‘inflation proof’. Or at least as resistant as possible to the corrosive effects that rising prices can bring.

So let’s check out what one ASX expert reckons is the best way to protect one’s wealth against inflation. Intermede Investment Partners CEO Barry Dargan recently spoke to Livewire Markets about how to position an investment portfolio in an era of high inflation.

Inflation is coming

Here’s some of what he opened with:

The sort of companies we own are companies that have very strong pricing power and so if we do get into a situation where inflation becomes endemic, as may well be the case, these companies will be able to pass on inflation to either consumers or to their customers…

Many of the companies that we own are actually companies that don’t charge anything for their product, so things like social media companies where essentially the people that pay them the money are B2B [business to business]… It’s companies buying advertising on their space and you know, that sort of cost can definitely be passed on.

Mr Dargan says that the best kinds of these companies are ones with ‘moats’ around their business. A ‘moat’ is a Warren Buffett-coined term that describes a company’s intrinsic qualities that protects it from threats. An example of a moat is a strong brand. Such as those that companies like Apple Inc (NASDAQ: AAPL) or the Coca-Cola Co (NYSE: KO) possess. Moats like a strong brand can help a company increase its prices to reflect inflation without losing customers. Or even, as Dargan suggests, do it without the customers noticing.

How does one invest in a high interest rate environment?

But Dargan also warns that central banks around the world may be “behind the curve” when it comes to inflation and interest rates. He is predicting that “we’re probably in a slightly more inflationary environment than we were going back the last few years. By which I mean, probably something in the light, in the region of maybe two to 3% annual inflation”. This will inevitably see higher interest rates, Dargan warns. Still, he doesn’t reckon rates will be “going up to anything like historically high levels”.

Going forward, Dargan reckons we will indeed see companies that could be described as ‘value shares’ doing well over the next few years. He points to banks, oil companies, and miners as some of the businesses that will benefit from a higher interest rate environment. But he also warns that these gains might be cyclical. As such, he argues that investors might do better by just focusing on the companies that “can pass on price and they continue to compound their earnings and grow reliably, annually each year”.

Easier said than done, one could say! But that’s how one ASX expert is thinking about inflation today.

The post Looking for ASX shares that perform under higher inflation? Read this appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns Coca-Cola. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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